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Humana Extends Value-based Care Services in North Carolina

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Humana Inc. HUM announced an agreement to expand alliance with Aledade, Inc. The latter collaborates with various health institutions for the creation of Accountable Care Organizations (ACOs), which provide several health-based services.

The deal, already in force, will likely enhance value-based care services in North Carolina for members participating in the Humana Medicare Advantage business.

Health specialists will now have access to both company’s knowledge and expertise. This, in turn, will help physicians take more coordinated primary care of their patients.

Humana seems to be in a bid to enhance its value-based care services. Last year, it announced similar agreements for its Medicare Advantage members in Louisiana, Pennsylvania and West Virginia. The latest move also caters to the increasing demand for value-based care.

Moreover, the action is in line with Humana’s endeavors to expand its Medicare business, which has been performing well for the past several quarters. Also, the Individual Medicare membership rose 17.1% year over year in 2019. The company expects 2020 Individual Medicare Advantage membership of 270,000-330,000, suggesting a 7.5-9.2% rise from that reported in 2019.

Humana reports revenues under three segments — Retail, Group and Specialty, and Healthcare Services. The extended tie-up is expected to benefit the company’s Healthcare Services segment, which offers services to Humana’s health plan members as well as third parties, including pharmacy solutions, provider services, home-based services and clinical programs. Revenues in the segment accounted for 39.7% of total revenues.

Shares of the Zacks Rank #3 (Hold) company have gained 15.3% in a year, outperforming the industry’s rise of 3.3%. We believe that strong growth in the Medicare Advantage business on efficient operating initiatives will drive the company’s shares going forward.

Stocks to Consider

Some better-ranked stocks in the healthcare are Stryker Corporation SYK, UnitedHealth Group Incorporated UNH and IDEXX Laboratories, Inc. IDXX, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

All the three stocks beat the Zacks Consensus Estimate in the last reported quarter by 1.22%, 3.45% and 14.29%, respectively.

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